Which of the Following Is True of Equilibrium

question 49

Multiple Choice

Which of the following is true of equilibrium?

• A) Equilibrium refers to a situation where the government allocates resources among economic agents.
• B) Equilibrium refers to a situation where all economic agents simultaneously optimize after considering one another's actions.
• C) Equilibrium refers to a situation where all economic agents are making suboptimal choices and have an incentive to change their behavior.
• D) Equilibrium refers to a situation where an economic agent can be made better off without making anyone else worse off.

---

Definitions:

Total Cost

The sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Total Variable Cost

The overall expense that varies with production output, including costs like labor and raw materials.

Total Cost

The sum of all expenses, variable and fixed, incurred in producing goods or services.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, typically decreasing as production scale increases.